Kier Group has won the race to buy Laing Property from John Laing plc, paying £40m in a joint venture with the Bank of Scotland.
As tipped in Property Week magazine on 15 March, Kier is understood to have beaten rival bids from Miller Developments and Liberty Property Trust to buy Laing Property. The sale attracted 74 expressions of interest when it was first announced in November 2001.
Laing Property had estimated net assets of £30.3m at 31 March 2002 and achieved a sale price some £9.7m ahead of book value. During 2001 the business made a pre-tax profit of £5m.
The portfolio contains 23 offices and industrial properties at various stages of development, located mainly along the M3/M4 corridors in southern England.
Kier and Bank of Scotland have each invested £16m in loan stock and contributed 50% of the equity to form a new joint venture company, Kier Developments, to buy Laing Property.
The deal has greatly enhanced Kier's property interests. Construction and services accounted for £1.1bn of the group's £1.25bn turnover in the year to 30 June 2001. The homes and property arms had a combined turnover of £126m and a combined pre-tax profit of £11.2m.
The newly formed Kier Developments will remain a separate entity to the existing Kier Ventures property subsidiary. However, Richard Simkin, who has been heading up Kier Ventures, will now become managing director of both organisations.
Chris Bond and Nigel Turner, who were directors for Laing Property's office and industrial arms respectively, have transferred across from Laing to join the board of Kier Developments. James Byrne, a longstanding director at Kier Ventures, has also joined the board of Kier Developments. Derrick Arden, chairman of Laing Property, remains with Laing. In all, around 20 of Laing Property's 34 staff will transfer to Kier.
Deena Mattar, finance director with the Kier Group, commented, "We've had a strategy of wanting to grow the property side of the business for about two years. This was the best quality portfolio we've seen in that time."
She added, "Some of the portfolio is mixed-use, which gives opportunities for our house building division, and there are also some opportunities for our construction business."
Laing Property's major office schemes include projects in Bristol, Camberley and Reading. Industrial projects include developments in Exeter, Bristol, Enfield and Hounslow. The company is also developing a new town centre retail scheme in Enfield.
Kier Venture's biggest project is an 8,360 sq m (90,0000 sq ft) office development in Whitehall, London, which will be let to the Department of the Environment, Food and Rural Affairs on completion. It is also building a 65,000 sq m (700,000 sq ft) distribution centre for Sainsbury's at Waltham Point, near the M25 in Hertfordshire.
Laing was forced to sell Laing Property after running up disastrous losses in its contruction business (see related articles below).